Following the recent reciprocal tariff announcements, a pressing question emerges: Are US tariff hikes a setback or a strategic opening for Bangladesh? There is reason for cautious optimism, particularly regarding Bangladesh’s garment exports to the US. With tariffs of 20 percent now leveling or even favoring Bangladesh over key competitors, the country finds itself in a potentially advantageous position. Chinese products, likely to remain more heavily taxed, open the door for investment to shift and help level the playing field. Meanwhile, India’s increased tariff may further tilt the scales in Bangladesh’s favor across various product categories. However, tariff increases come with global ripple effects. They elevate retail prices and strain supply chains, often resulting in declining orders and downward pressure on supplier prices. This could squeeze margins for Bangladeshi manufacturers. Still, historical trends offer encouragement: Bangladesh’s apparel exports to the US grew by 35.94 percent over the last decade, including an impressive 40.45 percent post-COVID surge between 2020 and 2024. Much of this success stemmed from capitalizing on opportunities as Chinese firms redirected their strategies. Maintaining momentum in the US market means resisting premature price cuts, which could undermine fair competition. Instead, manufacturers must remain vigilant tracking market trends, anticipating disruptions, and investing in innovation. Staying agile and informed is essential for staying competitive in today’s evolving trade environment.
My Body is Burning How Climate Change is Worsening Bangladesh Labor Exploitation At the same time, a broader global outlook is critical. Heavy reliance on a single market exposes exporters to risk. While the US accounts for roughly 20 percent of Bangladesh’s garment exports and Europe around 50 percent, diversifying into emerging markets such as Japan, Australia, the Middle East, and Latin America is essential for long-term stability and growth. With the global apparel market valued at approximately $550 billion, tapping into these regions is no longer optional but strategic. Bangladesh must also move beyond its traditional focus on low-and mid-tier products in the US market. By expanding into high value-added segments, the country can attract premium buyers, meet evolving consumer expectations, and seize business opportunities previously dominated by China. As global competition intensifies, challenges such as the US’s proposed 40 percent local value addition requirement for woven garments loom large. Preparing for Bangladesh’s graduation from LDC status calls for greater investment in backward linkages and local value chains to reduce dependency and meet trade rule thresholds.
Ultimately, Bangladesh’s long-term competitiveness will depend
more on internal reforms than external conditions. While war,
natural disasters, and tariffs are beyond control, factors such as
energy pricing, infrastructure development, efficient logistics,
strong banking systems, and factory productivity are all within
reach. Strengthening these will ensure resilience and responsiveness to global demand for quality at competitive prices. With apparel contributing approximately 85 percent of Bangladesh’s total exports, a far greater reliance than Cambodia (36 percent) or Pakistan (26 percent), the sector’s vitality is clear. For comparison, apparel exports constitute just 4% of China’s exports. This underscores why preserving and enhancing Bangladesh’s competitive edge is not just important, it is existential.
Author is a Mohiuddin Rubel has more than 23 years of experience in Bangladesh’s textile sector. Rubel is a former director of the BGMEA and currently additional managing director of Denim Expert Ltd. and managing director of Bangladesh Apparel Exchange Ltd. Rubel is committed to improving sustainable and ethical manufacturing practices while promoting Bangladesh’s apparel industry globally.
